22 July 2011 – IT outsourcing agreement
The company has entered into an agreement with HCL Technologies Limited and HCL Great Britain Limited to outsource a significant portion of Mecom’s IT operations. Over the 5 years the total cost to Mecom of services to be provided by HCL will be in excess of €90m. During the next 18 months Mecom will bear transition and other exceptional up-front cash costs amounting to approximately €19m in addition to outsourcing-related capital expenditure costs of approximately €12m, much of which will be incurred in 2012. The EBITDA benefit of the contract is anticipated to be in excess of €12m per annum and the benefit enjoyed in 2012 will be dependent on the exact timing of service commencement. The shares remain a BUY.